The Senate and excess ATM charges

The Senate resolution on banks in the country imposing excessive and illegal charges on their customers’ ATM transactions is significant and timely.

According to reports, the resolution specifically directed the Committee on Banking, Insurance and Other Financial Institutions and Finance to conduct an investigation into the propriety of ATM card maintenance charges in comparison with international best practices and report back to the Senate.

Besides, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele would be asked to explain why official charges as approved by the bank were skewed in favour of banking institutions as against the ordinary customers of banks.

The resolution urges the CBN to get commercial banks to suspend the ATM card maintenance charges being arbitrarily deducted from customers’ accounts.

The resolution mandates the banks to reconfigure their ATMs to discharge up to N40,000 per transaction, pending the outcome of the investigation by the committee.

The Upper House also directs the Consumer Protection Council (CPC) to be up and doing in taking up the plight of ordinary Nigerians by looking into the various complaints of excess and unnecessary charges by banks.

This resolution was said to have been prompted by a motion moved by Senator Gbenga Ashafa who made reference to “a campaign tagged: Reform9jabanks, which began on Twitter when a United Kingdom-based Nigerian medical doctor, Henry Olufunmilayo, lamented the state of banks in Nigeria compared to those abroad.”

It is important to point out that for several years now, excess and/or illegal bank charges have been a major issue in the Nigerian banking industry. As far back as the late 1990s, it had become very prevalent that it attracted the attention of the Bankers Committee (BC), chaired by the governor, Central Bank of Nigeria such that in year 2001, the BC set up a Sub-Committee on Ethics and Professionalism in the Nigerian banking and finance industry. While two of the cardinal objectives of the sub-committee were to, “ensure highest level of adherence to sound and generally accepted banking practice” and to “uphold the integrity of the (banking) profession in order to instill public confidence in the banking system”, two of its duties are to “consider complaints from the public and within the banking system; and recommend sanctions on any erring members to the Bankers Committee.”

At the end of 2017, that sub-committee was reported by the Chartered Institute of Bankers of Nigeria (CIBN) to have, since its inception, recovered a whopping sum of N28.43 billion and US$17.39 million for complainant bank customers.

Despite the recoveries by the sub-committee, the challenge of customer complaints, especially on excess bank charges, trended upwards as banks continued to fleece their innocent customers. Consequently, the CBN established within its structure, Consumer Protection Department (CPD).

CPD is involved in complaints management. Since its inception in 2012, CPD has, according to CBN reports, recovered more than N65 billion for customers who mostly complained of excessive charges by their banks.

Beside the aforementioned reports, there have been innumerable publications on banks’ perennial imposition of excess and illegal charges on their customers. In several cases the CBN, Economic and Financial Crimes Commission (EFCC), Consumer Protection Council (CPC), the National Assembly (NA) and other relevant government organs had been called upon to intervene in stopping banks from the unwholesome and unacceptable practices.

But, unfortunately, none of them has heeded the call, perhaps because most of them have been benefiting (as shareholders in banks) from the illicit bank deals or simply because the outcries did not emanate from overseas.

Otherwise, how is it that this long-standing vexatious and outrageous issue has become due for Senate’s intervention because of the lamentation, “by a United Kingdom based Nigerian Medical doctor?’’ Is this not evidence that leaders in this country do not count on outcries by citizens within the country’s boundaries? They are either speaking to Nigerians from overseas or reacting to comments from there.

Whatever is written or said in Nigeria is inconsequential. Is it not tragic in the extreme that if a complaint is merely whispered abroad, then attention must be paid to it.

While Nigerians should begin to learn how to bear this type of leadership style, it is necessary to let our leaders understand that essentially, it is inhabitants in the country who are wearing the shoes that know best where the shoes pain most. They suffer at least 99% of what happens in the country.

Those who come in and go out or are just distant observers may share only 1%. Thus, our leaders should be sensitive to complaints emanating from the local environment. The plights of the people must count.

On the other hand, the CBN can’t be an innocent bystander here. It is rather pathetic, therefore that CBN, the licence issuer to banks, has been incapable of stopping its licensees from imposing excessive charges on their customers.

Rather than pursue this course which is achievable by causing banks to comply with laws and regulations and, where necessary, imposition of exceptional penalties on deviant ones, it is comfortable with “recovery of excess charges.”

How much of such pervasive excesses can it recover to give unshaken confidence to the banking public and encourage financial inclusion?

Why should excess bank charges be the rule rather than the exception in Nigeria? Why should banks in the country be charging for Automated Teller Machine services when such services are reported to be rendered free in other jurisdictions in the continent? Why did CBN inform the entire world that Commissions on Turnover (COT) have been stopped but it re-introduced it with Account Maintenance Charge, computed on the same bases as COT? Most importantly, should charges by banks be unduly high given subsisting economic realities in the nation?

Aside from the high charges, it does appear banks and CBN ensure customers pay more charges by limiting the amount of cash withdrawals from ATMs in a transaction.

Imperatively, a customer who needs say, N50,000.00 may need to visit ATM about five times to make withdrawals; and at each visit a fee must be paid. And, if one is unlucky to use the ATM of a bank different from that of one’s bank, a fee as high as N65.00 per transaction must be paid commencing from the fourth visit.

Although the Senate based its resolutions on complaints in respect of excessive ATM charges, let it be known that charges by banks in Nigeria are numerous. Even against the fact that most of them have been codified in the CBN-issued Guide to Charges by Banks and Other Financial Institutions in Nigeria (on behalf of the Bankers Committee), the banks not only exceed specified rates but also introduce and apply other charges without written approval from CBN; that is, contrary to the provision that requires them to, “present any other product, service and/or charge not covered by this Guide to the Central Bank of Nigeria for prior written approval.”

While the belated resolutions of the Senate must be welcome by the entire banking populace, but shouldn’t the primary culprits (banks) be also summoned to, at least, explain their motivations for unethical and unprofessional practices against their customers? Why they cannot stop imposition of excessive charges on their customers? Why their licences should not be revoked for incessant willful injuries on their customers albeit, the national economy? The country may not be cleansed of excess bank charges unless and until the beneficiary bank operators publicly denounce it and assure their refrain from the practice.

It is heart-raking that banks in the country are exuberant in disobeying laws and regulations and their officials are happy to annually announce higher revenues and profits, which are certainly unethically achieved. It is also unfortunate that most of them are even honoured with awards, both locally and internationally, sometimes by the news media.

In the main, as the Senate seems to have risen to its responsibility to the people, in this regard, the public awaits the outcome of the investigations and subsequent behaviour and practices of banks in Nigeria towards their customers.

In the same vein, the CBN should not wait for a Senate directive to play its regulatory role in the banking sector.